Michael Feniger: Hi, guys. Thanks for taking my question. Can you just help quantify how much were the costs up in 2022 versus 2021, on liquid diesel alone and what you’re kind of embedding for that increase in 2023?
Alan Palmer: Yes. Well, we talked about last quarter that a good indicator on liquid asphalt is how much do we get back through the indexes, and we shared last quarter, we got — the third — our third quarter, we got an unprecedented amount, over $10 million, where we got over $10 million in the fourth quarter. So year-to-date, that’s $24 million. But the cost of liquid asphalt and a ton of asphalt has gone up probably, on average, for the year about 40%. So we’ve seen aggregate has gone up. If you go to the full year last year and the full year this year, around 12%. Those are two of our main components that go in. And of course, we’ve seen increases on everything. And as we talked about Jule’s mentioned, the first six months of the year, most of that increase came out of our profit, and that suppressed our margins as we began to bid that in our later work and most of the work that we’re carrying into 2023, we got that built in.
But I’d say, on average, if you take everything labor and all from October 1 of last year to October 1 of this year, it’s probably an average of 10% to 12% of total increase.
Jule Smith: Michael, I would just say one thing that tells me that even with growing that we’re doing a good job of getting these costs in our bids. In the fourth quarter, we generated $26 million of cash from operations. So that’s a good healthy sign even with good top line growth that we’re generating cash.
Michael Feniger: Fair enough. Thanks everyone. And just lastly, look, you’re growing double digits, and we’re not really even seeing the IIJA yet. So just help unpack like what’s the time line here? Like when do you see the IIJA funding finally get to the state level? How long for the states do letting and that becomes a project you book in the backlog and then you recognize for revenue. Is that more of a 2024 story?
Jule Smith: No, good question, Michael, because the IIJA took longer than most people anticipated to start rolling out. But it’s definitely coming out now. It’s in the project lettings. I see that continuing in a steady way. As I said a year ago, almost 1.5 years ago, the COVID relief money inflated the state budgets for the last 1.5 years. And now the IIJA is really just going to replace that, and we’ll continue to — we’ll see healthy project lettings for quite a while. The states, as I said earlier, have to use that money. We’re seeing it across the board in all of our states. There’s just good healthy lettings next month. Alabama is having one of the largest lettings in its history, I think. So it’s I envision to just see that for the next six to seven years as this money flows through, the states are just going to be making just significant investments in their infrastructure.
And we’re going to participate not only on the roads, but the airports have a significant investment, railroads, ports, we’re going to see a lot of that going on.
Michael Feniger: Perfect. Thanks everyone.
Jule Smith: Thanks Michael.
